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Police in Sweden have been accused of hushing up a series of sexual assaults by asylum seekers at Europe's largest teen pop festival, with one senior officer saying police wanted to avoid "playing into the hands" of the anti-immigration Sweden Democrat Party.

The scandal, which followed the leak of an internal memo to the Dagens Nyheter newspaper, is the latest in a ripple effect seen across Europe following the sexual assaults allegedly carried out by asylum seekers in the German city of Cologne at New Years.

The DN said that from the very first day of We are Sthlm, a free festival held last August for 13-19 year olds, police were aware of gangs of young Afghan men surrounding and sexually harassing girls. The 2014 event had seen a similar wave of assaults, the paper said.

In an internal police memo seen by the newspaper, officers identified a group of approximately 50 men, "so-called refugee youths, predominantly from Afghanistan," whom they suspected of being behind the attacks, adding that "several of the gang were arrested for sexual harassment".

Demonstrators protest against racism and sexism in the wake of the sexual assaults on New Year's Eve, outside the cathedral in Cologne, Germany. Photo / AP

Despite a record number of girls reporting crimes, police made no mention of the phenomenon in the report on the festival posted to their website, which said that there had been "relatively few crimes and few arrests given the number of attendants".

Sweden's Prime Minister called for an immediate inquiry into why no crimes were prosecuted and whether police hushed up the assaults. Dan Eliasson, Sweden's national police commissioner, agreed that the offences were "completely unacceptable" and launched an "immediate internal investigation into any wrongdoing or crimes".

German Chancellor Angela Merkel said that Europe had lost control of the refugee crisis, as she confronts public anger.

"All of a sudden we are facing the challenge that refugees are coming to Europe and we are vulnerable, as we see, because we do not yet have the order, the control that we would like to have."

Authorities in Cologne confirmed for the first time that the attacks were "almost exclusively" carried out by men "of an immigrant background". Police have identified 19 suspects so far, including 10 who are in the country as registered asylum seekers.

Right-wing demonstrators hold a sign 'Rapefugees not welcome - !Stay away!' and a sign with a crossed out mosque as they march in Cologne. Photo / AP

There are growing fears of a backlash against immigrants after 11 people were badly beaten in apparent revenge attacks in Cologne. Rioting reportedly broke out among far-right protesters in Leipzig, where a march by the city's branch of the anti-Islam movement Pegida was taking place.

"As disgusting as the crimes in Cologne and other cities were, one thing is clear: there is no justification for a general agitation against foreigners," said Heiko Maas, the Justice Minister. Some people "appear to have just been waiting for what happened".

Bild claimed that a suspected terrorist who was shot dead trying to attack a Paris police station last week was arrested almost two years ago for sexual assault in Cologne, groping women in a night club.